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Message
When to hire a CPA vs doing taxes on your own?
Posted on 2/1/23 at 9:05 pm
Posted on 2/1/23 at 9:05 pm
I’ll make this as brief as possible. I’ve always done my taxes myself via TurboTax. I try to break even and, for reference, last year I owed $100.
Fast forward to this year. I got a new job and for the first time making decent money. I’m a little over $20k more annually this tax year. Also, I received a generous bonus(first one of this size a little over $8k).
I go to file taxes this year and owe over $5k. I’m single with no dependents I can claim. I typically do standard deduction. Is it worth it, in your experience, to get a cpa in this situation?
Fast forward to this year. I got a new job and for the first time making decent money. I’m a little over $20k more annually this tax year. Also, I received a generous bonus(first one of this size a little over $8k).
I go to file taxes this year and owe over $5k. I’m single with no dependents I can claim. I typically do standard deduction. Is it worth it, in your experience, to get a cpa in this situation?
8
Posted on 2/1/23 at 9:15 pm to TheAstroTiger
As a single filler w/ no dependents, a good CPA will cost you AT MOST $400. That includes filing for this year and reviewing previous years to see if you screwed up and potentially recoup money from the errors.
If you are having to ask a forum like the money board you are obviously experiencing some anxiety.
I’m with you, I enjoy doing things myself to save a buck. In this case, spending a little money on a CPA may net you a saving and you will probably learn valuable accounting from them.
With this being said, absolutely hire a CPA.
Speaking from experience…
If you are having to ask a forum like the money board you are obviously experiencing some anxiety.
I’m with you, I enjoy doing things myself to save a buck. In this case, spending a little money on a CPA may net you a saving and you will probably learn valuable accounting from them.
With this being said, absolutely hire a CPA.
Speaking from experience…
This post was edited on 2/1/23 at 9:17 pm
Posted on 2/1/23 at 9:15 pm to TheAstroTiger
I hire one because I’ve got stock vesting every year and I’d rather pay someone to do my taxes and not worry about it. I owe 8k to 12k per year because I don’t have any deductions outside of the standard.
Posted on 2/1/23 at 9:19 pm to good_2_geaux
quote:
If you are having to ask a forum like the money board you are obviously experiencing some anxiety.
Yea I was definitely shocked to say the least. You are right, I will at least have peace of mind knowing I went to a cpa.
Posted on 2/1/23 at 9:24 pm to TheAstroTiger
I changed jobs and getting hammered I think the new withholding tables blow arse
Plus changing jobs probably made where you under withheld
Plus changing jobs probably made where you under withheld
Posted on 2/1/23 at 10:11 pm to TheAstroTiger
quote:
I’m single with no dependents I can claim. I typically do standard deduction. Is it worth it, in your experience, to get a cpa in this situation?
They aren't really going to be able to provide much value other than piece of mind in your situation. Even if you itemize TurboTax can easily walk you through that.
But like another poster said, it's not going to break the bank to get someone to do it for you. Just don't expect them to be able to change much as far as your bill.
Posted on 2/1/23 at 10:15 pm to TheAstroTiger
If your only income is a W-2, there’s not much a CPA can do for you. Taxes are extremely simple for W-2 employees. All the work has already been done by the time the forms get to you.
-Enter any mortgage interest you have
-Enter any property taxes you paid
-Enter your car tag Ad Val tax
-Enter charitable deductions
TurboTax can handle all that just fine. If you don’t want to owe, you probably just need to look at your withholdings.
Also look at your total tax not your refund.
-Enter any mortgage interest you have
-Enter any property taxes you paid
-Enter your car tag Ad Val tax
-Enter charitable deductions
TurboTax can handle all that just fine. If you don’t want to owe, you probably just need to look at your withholdings.
Also look at your total tax not your refund.
Posted on 2/1/23 at 10:18 pm to good_2_geaux
quote:
As a single filler w/ no dependents, a good CPA will cost you AT MOST $400.
Look you can probably find a good cpa to do it for that but that’s not the max.
Posted on 2/2/23 at 12:14 am to TheAstroTiger
quote:
Fast forward to this year. I got a new job and for the first time making decent money. I’m a little over $20k more annually this tax year. Also, I received a generous bonus(first one of this size a little over $8k). I go to file taxes this year and owe over $5k. I’m single with no dependents I can claim. I typically do standard deduction. Is it worth it, in your experience, to get a cpa in this situation?
Can you just open a traditional IRA with $6,500 from savings before the deadline and lower some of that burden while keeping your $6,500? Not even sure if that would work but it would help at least.
Posted on 2/2/23 at 5:50 am to TheAstroTiger
CPA here in the tax business.
We tell new lead calls all the time look if all you have is W2, some itemized deduction stuff that won’t add up to you itemizing, some childcare stuff, and minor interest, dividends, stock sales….we really aren’t going to be much benefit unless you just really don’t want to deal with taxes and we are a convenience thing. Much like I don’t want to Cut my grass and I’d pay the lawn guy double what he’s currently charging me if push came to shove.
Now on the other hand….if you have a small business, rental properties, or anything complex, that’s where our real value comes from. That’s about 75% of our 1040 client base.
Your situation without seeing anything sounds like a classic case of the employer withholding a lower % than your tax bracket (could be their frickup, a w4 issue, or just the tax tables). Go back to your pay stub especially for that bonus and see what percent they withheld for federal taxes. Now take that % and see what tax bracket you are in. If it’s much below your bracket there’s your problem.
We tell new lead calls all the time look if all you have is W2, some itemized deduction stuff that won’t add up to you itemizing, some childcare stuff, and minor interest, dividends, stock sales….we really aren’t going to be much benefit unless you just really don’t want to deal with taxes and we are a convenience thing. Much like I don’t want to Cut my grass and I’d pay the lawn guy double what he’s currently charging me if push came to shove.
Now on the other hand….if you have a small business, rental properties, or anything complex, that’s where our real value comes from. That’s about 75% of our 1040 client base.
Your situation without seeing anything sounds like a classic case of the employer withholding a lower % than your tax bracket (could be their frickup, a w4 issue, or just the tax tables). Go back to your pay stub especially for that bonus and see what percent they withheld for federal taxes. Now take that % and see what tax bracket you are in. If it’s much below your bracket there’s your problem.
This post was edited on 2/2/23 at 11:45 am
Posted on 2/2/23 at 5:54 am to TheAstroTiger
Obviously to get a full grasp on your situation, more information would be needed. But just from what you tell me in the OP, I'd tell you you could save a couple hundred bucks filing yourself, or you could just pay us and have the peace of mind.
This is assuming you have just the W-2 and no side hustles, maybe a 1099-INT or 2 for bank interest, not overly active in an investment account.
The jump in tax liability would probably be related to the change in jobs. When did you switch jobs? Since you are making more at the 2nd job, your withholding was probably inadequate during the time still spent at the original job. It's also possible you didn't fill out the W-4 correctly. The changes on the form in 2020 screw a lot of people up.
I'd also make sure taxes were withheld on the bonus you received.
TLDR; What the guy above me said
This is assuming you have just the W-2 and no side hustles, maybe a 1099-INT or 2 for bank interest, not overly active in an investment account.
The jump in tax liability would probably be related to the change in jobs. When did you switch jobs? Since you are making more at the 2nd job, your withholding was probably inadequate during the time still spent at the original job. It's also possible you didn't fill out the W-4 correctly. The changes on the form in 2020 screw a lot of people up.
I'd also make sure taxes were withheld on the bonus you received.
TLDR; What the guy above me said
This post was edited on 2/2/23 at 5:59 am
Posted on 2/2/23 at 11:26 am to BallsEleven
quote:
W-4 correctly. The changes on the form in 2020 screw a lot of people up.
Aint't that the damn truth
Posted on 2/2/23 at 4:55 pm to macatak911
quote:
CPA here in the tax business
I love when I click into a thread and all the hard work has been done!
Good answer by the way.
Posted on 2/2/23 at 5:39 pm to macatak911
Macatak's answer is probably the best one you will get.
-Also a CPA in the tax business
-Also a CPA in the tax business
Posted on 2/2/23 at 8:12 pm to Weagle25
quote:He could honestly skip that. With the new standard deductions, and interest rates being low, it’s extremely rare to itemize anymore.
If your only income is a W-2, there’s not much a CPA can do for you. Taxes are extremely simple for W-2 employees. All the work has already been done by the time the forms get to you. -Enter any mortgage interest you have -Enter any property taxes you paid -Enter your car tag Ad Val tax -Enter charitable deductions
Posted on 2/2/23 at 8:49 pm to TheAstroTiger
Thank you for the answers everyone. After looking at everything once more, I believe it has to be the bonus causing the issue. I will be prepared next year.
Posted on 2/2/23 at 9:46 pm to lsupride87
quote:
He could honestly skip that. With the new standard deductions, and interest rates being low, it’s extremely rare to itemize anymore.
Matters for state purposes in Alabama. Plus it takes two seconds so I don’t know why you would skip it even if it does nothing. Plug it in and see what it does.
Posted on 2/7/23 at 6:34 pm to Weagle25
Question about Tax programs.
Is there really any difference [amount of taxes you owe] between using Turbo tax or H & R Block?
Is either OK to use? I am retired and only have interest, dividends, retirement and SS income.
Is there really any difference [amount of taxes you owe] between using Turbo tax or H & R Block?
Is either OK to use? I am retired and only have interest, dividends, retirement and SS income.
This post was edited on 2/8/23 at 9:23 am
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